What happens if appraiser Cannot find comps? If the appraiser isn't able to find a single comparable property, you'll likely struggle to move forward with a mortgage on that site. Some lenders may be able to proceed on a case-by-case basis with a single comparable.
Full Answer
Are there any examples of comps used in an appraisal?
A couple of examples are available, but they were done several years back. They could not be used. The only set of comps the appraiser could find were residential houses, which were non-comps. The appraiser was stuck with a method that didn’t fit the property he was asked to appraise.
Can you appraise a property with no comps in the area?
The appraisers are saying it can’t be appraised due to no comps in the area. What else can we do? It’s always possible to locate comparables but they may not meet the underwriting guidelines of the bank you are using.
What do appraisers do when they can't find comparable sales?
When an appraiser can't find comparable sales they will usually try to look at a broader location or larger geographic area and if that doesn’t solve the problem they will usually look at older sales.
Why does the appraiser have to go further back?
Sometimes lenders place strict guidelines on what comps the appraiser can use. It sounds like they may have to go further away or further back in time to find something that compares to your property.
What do appraisers do after accepting assignments?
One of the first things Appraisers do after accepting an assignment is complete their subject property research, inspect the subject property and begin looking for comparable sales.
How long do appraisers look at sales?
If widening the search area doesn't solve the problem then going back in time often does, so appraisers go back past 90 days and look at sales 180 days or even a year old. In a slow land market for example you may have to go back even more.
Is it easy to spot similar sales?
Depending on the property type, location and market activity similar sales are usually easy to spot or it becomes painfully obvious that no sales are going to be a good match. If there are a number of recent sales it's just a matter of determining which of them are the best or the most similar.
Can an appraiser use the income approach to appraise a duplex?
If the duplex is a rental, and no recent sales comps are available, an appraiser should be able to use the income approach to come up with an appraised value .
Can an appraiser use comparables?
1) The appraiser will use the best comparables available , even if that means expanding the comparable search to a different market area/county/city. A local appraiser competent in your market area should be able to find comps and complete the appraisal. There is always a way to find comparable sales.
Why is it important to verify your MLS?
If MLS information is unavailable or sketchy, you usually don’t need to get creative: you’ll still find time-honored ways to do your job correctly.
Why are there no listings on Fannie Mae?
In a situation like that, you have virtually no listings or pending sales to work with, because properties are trading so fast. It’s hard to identify comps, and the ones you have are going to be dated. Meanwhile, you’re working with a Fannie Mae form that demands that you use the most similar comps available.
Why do you need an appraisal?
Typically, an appraisal is required by the buyer’s lender to make sure they haven’t offered more than the home is really worth. Occasionally, sellers use the services of an appraiser to price their home better too. Licensed Realtors and Real estate agents use the multiple listing service, or MLS, to find comps.
How much does it cost to hire an appraiser?
If you are having difficulty or aren’t confident with your price, you can always hire an appraiser. While this could cost you somewhere around $500, it will be worth it if it helps you avoid selling your home undervalue.
Why do buyers use comps?
The comparables should help ensure they don’t offer more than they should. When an appraiser is used, they will find comps to help them assess the home’s value.
Why are comparables useful?
Comparables are particularly useful to sellers who are taking house sale by owner route. FSBO sellers won’t have the help of a real estate agent to find comps and assess the best price to market their home. Buyers can also benefit from comps or comparable sales.
What is a comp in real estate?
Comps in real estate are similar homes in your area that have sold fairly recently. The more things the comps share in common with the seller’s home, the better. Real Estate agents refer to these as “sold comps.”. Comparables are particularly useful to sellers who are taking house sale by owner route.
What is a comp?
Comparables or comps are the terms used for similar homes that have recently sold to help find the best listing price when selling properties. The listing price should encourage buyer interest, reducing the time it takes to sell the home. But finding the right price isn’t easy, and making a mistake can cost you a lot.
Do comps need to be apples to apples?
The comps need to be apples to apples, not apples to oranges. Comparables also need to be interpreted correctly, or that will also cause improper home pricing. When someone asks what are comparables in real estate, the best explanation is properties most similar to the property being analyzed.
What If There Are No Comps To Price A Listing?
Sometimes when speaking at real estate agent meetings I will be asked what an agent can do when there are no comps to price a listing. Finding good sales can sometimes be difficult but it has to be done in order to accurately list a home for sale.
When You Think There Are No Comps To Price A Listing Follow These 6 Tips
Today I’m going to share with you what appraisers do when they cannot find similar and nearby sales to use as comps. Please leave a comment below and let me know your thoughts or any questions you might have.
